As foreshadowed in December, brokers WH Ireland and Blue Oar have agreed terms of a “possible” £16.2 million merger.
As foreshadowed in December, brokers WH Ireland and Blue Oar have agreed terms of a ‘possible’ £16.2 million merger.
Under the agreement, WH Ireland would offer 1p cash and 0.1194 of its shares for every share in fellow AIM counter Blue Oar (formerly Corporate Synergy). With WH Ireland at 72.5p, that would value Blue Oar shares at 9.66p each, which represents a premium of 197 per cent to Blue Oar’s 3.25p closing price on Friday – though still only a fraction of the shares’ 32.5p peak three years ago.
The offer is also fractionally lower than the hostile bid in December from Evolve Capital, an AIM-listed investment vehicle set up by Blue Oar’s founder, Edward Vandyk. That left Evolve with nearly 65 per cent of Blue Oar and it has given an “irrevocable undertaking” to WH Ireland to accept or vote for the bid.
Both brokers have been feeling the cold winds of the business and market downturns –Ireland’s own shares have fallen 60 per cent since 2007 – and both argue that the deal will create a stronger combined group.
Richard Ford, WH Ireland’s chief executive, says Blue Oar will make “an excellent strategic fit, strengthening our core activities of institutional investment banking, asset management and private client stockbroking”.
Blue Oar’s chief executive, Justin Lewis, suggests the proposed merger “provides a significantly enhanced platform to take advantage of dislocation among our competitors, while ensuring we have the resources to manage the combined business through the current downturn”.
